Addressing Foursquare’s Engagement Problem

This week Foursquare, the popular social check-in app founded by ex-Googler and Dodgeball founder Dennis Crowley, passed 20 million users and 2 billion check-ins. A number of media outlets ran paeans to the location-based service, calling out its rapid growth and elevating the company into the panoply of social Web superstardom.

Logically, Business Insider figured this was the proper time for a broadside directed at the company. Writer Nicholas Carlson took the opportunity to question the frequency that registrants use the app, and went so far as to speculate whether Foursquare was “browning around the edges” — as in, toast.

So which view of Foursquare is closer to the truth? The Business Insider article called out research that seems to indicate Foursquare does not enjoy much regular activity from its users and benefits from little of the social engagement and stickiness that have made Twitter and Facebook so powerful. Then again, its hard to argue with 2 billion actions of any kind, made in a scant period of a few years.

In my own circle, I have noticed less and less usage of Foursquare even as Twitter usage has held steady and Facebook usage has grown. I personally think that Foursquare’s engagement problem is driven by the fact that users don’t view the application as communications platform. Yes, people track each other’s check-ins and you can pass messages in Foursquare. But for some reason, this part of the service never really hit critical mass. I am not entirely sure why, but I have some rough ideas.

For starters, Foursquare was initially designed not so much as a two-way communications tool as a broadcast mechanism. In that, it was quite effective but I believe that two-way communications have become more important as overall engagement in social media has risen. A check-in, by default, is a one-way communication and not a conversation. Facebook, by contrast, has evolved as multi-party conversation tool with people commenting on different items in the stream and talking back and forth. Twitter, likewise, affords people the capability to hold a conversation.

I personally think that Foursquare’s engagement problem is driven by the fact that users don’t view the application as communications platform.

As Foursquare has evolved, it hasn’t managed to move too far beyond the check-in phenomenon. The company has added some smart discount offerings, locking in a big deal with American Express to allow local merchants to offer up deals to users who sync their AmEx cards. And the company also smartly worked in the ability for publishers and third-parties to publish best-of lists that auto-notify users when they are close to desired attractions (prize-winning pizza joints or ice cream shops, for example).

These are both smart plays. But they function on an older model of broadcast which is, let’s face it, a crowded market. Dozens of companies seek to deliver some sort of coupon or loyalty program to mobile devices. Best-of lists are exceedingly easy to access on Yelp, Google and many other services that deliver well to the mobile footprint.

So do I think Foursquare is toast? Hardly. Any community that continues to grow, even slowly, is far from toast. With a huge $50 million funding round still sitting in its coffers, the company can afford to revisit its entire model for monetization and engagement. Whatever the case, Foursquare will ultimately be a successful business — anything of its stature could be acquired for the size of the potential accessible user base alone. So the downside for Dennis and company is likely quite minimal. Yet all signs point to 2012 being a year of big changes for Foursquare if the company wishes to burst into the top ranks of the social media firmament alongside the big three of Twitter, LinkedIn and Facebook.

Alex Salkever is an executive at a cloud computing company and a former technology editor of BusinessWeek.com. The views expressed in his column are his own and not those of his employer. His Personal Fight column appears every Wednesday on Street Fight.